Accrual Basis of Accounting versus Cash Basis of Accounting On December 31, Hermani Patterson completed his first year as a financial planner. The following data are available from his accounting records: Rent expense for year just Fees billed to clients for services rendered $95,000 ended $10,800 Utility expense Cash received from clients 84,000 incurred 2,500 Utility bills Supplies purchased for cash 4,300 paid 2,200 Salary earned by Supplies used during the year 3,300 assistant 30,000 Salary paidto Cash paid for rent (rent is paid through Feb. of next year) assistant 27,500 12,400 a. Compute Hermani's net income for the year just ended using the accrual basis of accounting. $ 0 b. Compute Hermani's net income for the year just ended using the cash basis of accounting: $ 0

Accrual Basis of Accounting versus Cash Basis of Accounting On December 31, Hermani Patterson completed his first year as a financial planner. The following data are available from his accounting records: Rent expense for year just Fees billed to clients for services rendered $95,000 ended $10,800 Utility expense Cash received from clients 84,000 incurred 2,500 Utility bills Supplies purchased for cash 4,300 paid 2,200 Salary earned by Supplies used during the year 3,300 assistant 30,000 Salary paidto Cash paid for rent (rent is paid through Feb. of next year) assistant 27,500 12,400 a. Compute Hermani's net income for the year just ended using the accrual basis of accounting. $ 0 b. Compute Hermani's net income for the year just ended using the cash basis of accounting: $ 0

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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